S&P: Lippo Karawaci on watch

S&P said it placed the B+ long-term corporate credit rating on Lippo Karawaci Tbk., along with the B+ long-term issue ratings on the company's senior unsecured notes and the axBB Asean regional scale rating on CreditWatch with negative implications.

The agency said it placed the ratings on CreditWatch because Lippo's interest-servicing capacity and financial flexibility could reduce due to subdued operating conditions, potentially weaker operating margins and the outcome of a proposed rights issue at its healthcare subsidiary, PT Siloam International Hospitals Tbk.

S&P said it expected a bottoming of property sales for rated Indonesian real estate developers in 2016, arising from the uncertainty associated with a tax amnesty.

The property sales forecasts had assumed a gradual improvement in market sentiment and sales in 2017 and 2018 from the gradual resolution of the tax amnesty and new project launches by developers, the agency said.

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